Gold attempts recovery from major wave of overnight selling. Piepenberg: ‘smart money understands the difference between staying rich and getting rich’

(USAGOLD – 1/6/2021) – Gold recovered quickly from a major wave of selling in overnight markets that took the metal from two-month highs at $1956 to $1925 at one point. It is now trading at $1938 – down $14 on the day. Silver is down 17¢ at $27.47. The downward spike caught many by surprise as there was no apparent reason for it, except perhaps some entity taking profits on a massive position, i.e., selling the news out of Georgia. After all, at $1956, gold had already posted a more than 4% gain in 2021 on a wave of New Year buying. Signals Matters’ Matthew Peipenberg had some interesting things to say about gold buyers in a piece posted recently at the GoldEagle website.

“Because unlike the straw and mud of fiat currencies and dangerously overvalued stocks and bonds,” he writes, “gold rises strong (rather than falls into dust) when the market wolf huffs and puffs and blows bad portfolios down. Smart money, like just about anything smart, including that third little piggy above, are by nature a smaller circle, a more far-sighted minority, and thus think more of steady wealth preservation than easy wealth creation. In short, the smart money understands the difference between staying rich and getting rich. Physical gold, as a timeless (rather than trendy or pass?) instrument of wealth preservation, serves as the historically-confirmed and surest way to ensure one’s wealth against the ravages of currency debasement.” Our Chart of the Day unambiguously supports Piepenberg’s argument. Gold has posted gains in sixteen of the last twenty years.

Chart of the Day

Gold Price
Percent increase or decrease over prior year
2000-2020bar chart showing gold's annual percentage increase 2000-2020Data sources:  St. Louis Federal Reserve [FRED], ICE Benchmark Association
Chart by • • • Click to enlarge

Chart note:  For the full year 2020, gold turned in its best year since 2010, rising over 24% and ending the year at the $1900 mark. As you can see, gold posted gains in sixteen of the last twenty years – a formidable record by any standard.

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